Creating product strategy

Part 1 of 3 in a product strategy series (1.Creating, 2.Communicating, 3.Executing)

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Product strategy is your plan for winning and achieving your company, team, or product's mission. 

It's one of the most enjoyable and fulfilling parts of product management because you get to think long-term, be creative and analytical, and ultimately shape arguably the most important document on the team.

Why? Because the product strategy is the company's map and set of directions to whatever it is you're trying to achieve that everyone bands behind. A thoughtful and well-crafted strategy plays a huge role in determining the trajectory and success of a company in the market, and a bad strategy (or no strategy) can be detrimental.

Where product strategy fits in 

Before we dive into product strategy, it's helpful to understand where it fits into the planning cycle.  Here is a handy illustration. 

You can see that the product strategy is essentially the relationship between what the company is trying to achieve, and actual product and engineering work that gets planned and executed on. 

First start with your company objectives. The mission and company strategy always come first – and within this you have your company's vision for the future. This is your company's why

Then you have your product strategy. This is how you connect the company objectives (the why) to your product delivery (the what). 

Your product strategy then informs product delivery. Once you know how you will grow and win, you can have a tactical roadmap and measurable goals.

In short this is the sequence you follow when you plan your strategy: 

1. Mission: What are you trying to achieve?

2. Vision: What does the world look like when you've achieved it?

3. Strategy: How will you achieve it?

4. Goals: How will you measure our progress towards it?

5. Roadmap: What do you need to build to grow and get there?

Why your strategy matters so much

Your mission and vision usually stay pretty constant, while everything from strategy onwards changes. You solve challenges and achieve your goals – so they change. You ship products – so your roadmap has new initiatives. And as the market changes you adapt your strategy to continue growing, solving important problems and going after new opportunities.

Your strategy therefore helps you create and maintain:

  • Alignment. It aligns the goals and objectives of the business, and makes sure the company is spending time on the right things.

  • Clarity. It communicates to the delivery team and stakeholders what you are solving for, plan on building, and the metrics you want to move.

  • Focus. It keeps everyone moving forward on a focused journey.

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3-Stages to product strategy

Now that you know what product strategy is and why it's important, you should know that there are 3 important stages of product strategy you need to get right.

  1. You need to be able to create the actual strategy

  2. You need to be able to communicate it effectively

  3. You need to be able to execute on it

If you fail to do any of those things, you're not going to have a winning strategy. 

We'll be covering each of these areas in more detail (in separate newsletters), this week is all about number 1 - creating the strategy

Product strategy template 

Your product strategy needs to be a compelling story. People buy into stories that excite them, and this docs purpose is to band a team together around a companies north star. 

I like to break up the product strategy's story into 4 core parts.

First, it's about Where We Are Going. Then, a focus area is Why that is the direction we should be heading? Once Why is clear and exciting, I move onto the strategic piece of How We Grow from where we are today in order to reach that vision for the future – this is the strategic framework. Finally, the last part is about What you're going to tactically do as part of that growth plan – this moves into your product roadmap. 

Below is my template for product strategy. 
 

                         [COMPANY] PRODUCT STRATEGY

                                 ---Part 1: Where We Are Going---

  • Company Mission 
    [What your company is trying to achieve]

  • Product Vision 
    [Your inspiring description of the future you're heading towards]

  • Overarching Goals
    [What high-level objectives is your company striving towards]

                                  ---Part 2: Why We Should Go There---

  • Market Hypothesis 
    [What you believe is happening in the market - macro tailwinds/headwinds to help point the ship]

  • Problems
    [What key customer problems you are solving, and for who.]

  • Growth Opportunity 
    [How solving those problems for these customers helps you grow]

  • Why We're Well Positioned
    [Your leverage and advantage for solving those problems.]

                   ---Part 3: How We Get There (Strategic Framework)---

  • Strategy Kernel

    • Situation …

    • Complication: …

    • Solution: …
      [This should outline what's currently going on, what the challenges are with that, and what your desired state is. This should be insightful, but simple to understand] 

  • Strategic Growth Pillars
    [What your major bets or investments are to be successful and get to that desired state.]

    • Pillar #1, #2, #3, etc
      [For each pillar, dive into the following details] 

      • What:…
        [Short description]

      • Why/Impact: …
        [Explain the context of why this is important. This is your hypothesis for this big bet.]

      • Success:..
        [Short description of what success looks like]

      • Initiatives:…
        [Overview of the projects within this pillar for it to be a success, what the opportunity/problem is, and each initiatives believed impact]

                           ---Part 4: What We're Doing Now (Roadmap)---

  • Product Goals
    [High-level overview of how you're measuring your strategy's success] 

  • Product Roadmap
    [Your prioritized and time-lined view of how you're executing those initiatives]

Developing your product strategy

First, what makes a great strategy

Before diving into the process of actually creating the product strategy, it's important to know what a good strategy looks like. 

  • Vision rooted. It's stubborn on vision, and flexible on details.

  • Problem-Opportunity oriented: It clearly identifies the problem, and what the business opportunity is to solving it.

  • Insight-driven: It's largely driven by insights gathered from both quantitative and qualitative research.

  • Actionable: It outlines a plan with concrete investments that will solve the problems and help the company grow.

  • Focused: It has a small number of high-leverage bets.

  • Cohesive: It tells a story that creates a clear and structured path from the bigger picture problem to the detailed solution.

  • Simple. It should understandable and not overly complicated. The easier it is to read, follow, and remember the better.

10 step process (guide-rails)

Different companies will have different planning cycles, and that depends on the time-horizon for the strategy. If you're putting together a three-year strategy, then you won't be going through this process every year. 

However, even if you are working with a 3-year strategic plan, things change in the market and it's extremely important to not become complacent in that gap between cycles. This means each year, even if you're not going through this entire process of developing a strategy, you should carve out time to review, verify, and change if needed.

So, now that you know what makes a great product strategy, let's go through a 10-step approach you can use for putting your strategy together. 
 

1. Make the time. 

You have to intentionally make time to be strategic. There's always stuff going on and doing short chunks of work between meetings and other tasks is disruptive. Blocking out wider gaps of time on your calendar where you can be uninterrupted and focus on strategic thinking and planning is extremely important. Product strategy pulls on all your analytical and creative skills and pushes you to use every nook and cranny of your mind. It's fun and challenging and the most productive work comes when you make space for it.


While you block time and clear stuff up, remember you still have to show up for your other responsibilities.
 

2. Gather information.

Now that you have time, the first thing to do is lots of discovery. Product strategy, like the products you build, should never be based on ideas or just intuition. Those certainly play a role, but if should never be the foundation for it and you should never make a strategy in a vacuum. That means the first priority is to get qualitative and quantitative customer, data, competitive, and market insights . During the gather phase, it's extremely important to interview and speak with internal people. 

Spend time on this phase – it's the important legwork towards a great strategy. 
 

3. Develop the high-level vision.

If you already have a defined and compelling vision statement, then you're not re-writing the book here and don't need to come up with a new one (more here).

However, if you do have one but you think it's either (1) outdated or (2) needs improvement, then you're in a position where you can rework one and present it to stakeholders.

If you don't have one yet, then this is the first element of the product strategy you should create. It's largely what everything else in the plan stems off. 
 

4. Define the overarching goals.

These are the high-level objectives that your company is trying to achieve and your top business priorities. The strategy you're putting together tells the story of how you grow towards these big-picture goals from where you are today. For example:
 
Today (100K bookings + 1 country) => Goal for Future (1M bookings + international) => Strategy for how to get there (…)

Without clear goals upfront, you're burying the lead. 

These goals can be influenced by you, but it's important you speak with executives and stakeholders during discovery to align with what they see as priorities for the business. 
 

5. Define your hypotheses, problems and opportunities.

Using all the insights you gathered in step 4, starting writing down the most important takeaways and communicating what's happening in the market, who the target audience is, what problems are worth solving and how solving them translate into business opportunities for the company. 
 

6. Define the situation, complication, solution.

Now that the scene has been set, this is where you start working on thinking about how you carve a path from the problem towards your vision. In other words, what would it take for you to get from A to B? How will you grow go from the current to the future?  

This is a handy way to present a summary of this information. 

  • List out the primary customer needs in a column

  • List the current approach to solving in

  • List the current challenges (what's changing?)

  • List what the desired scenario is 

    This is a story telling technique is based on the book Minto Pyramid Principle, By Barbara Minto.
     

7. Define your 3-4 big bets. 

Your strategic growth pillars are you main investments for how you will actually go about realizing that desired state. They are the bedrock of the strategy and roadmap. Within each of these pillars you should outline; (1) what it is, (2) your hypotheses, (3) what it would look like if this bet paid off, and (4) the tactical projects you can deliver that would help you get there. 

A “strategy” that is wish-washy, full of buzzwords and nice aspirational ideas is not a strategy – it's just a goal. Point 6 and 7 here are the kernel of a good strategy, because it clearly diagnoses what is currently going on, what's wrong with that, and has a guiding high-level plan that cohesively tells you and your team how you're going to overcome that challenge. The roadmap that will follow from your strategy is the set of coherent actions that define how you are going to actually execute on that guiding policy. This kernel is vital for your strategy, and should be simple and understandable by anyone.
 

8. Get early feedback on your draft.

At this point, you should have a draft of Part 1 to Part 3 in the template filled out. You want to make sure you're on the right track before spending more time fleshing the strategy out and creating deliverable artifacts, and the best way to do this is to bring an early draft to stakeholders and your manager for feedback. 

This first draft round should not be polished. Its purpose is to get the ball rolling and give people something concrete to look at and share feedback on. It's like your MVP for your product strategy. The more polished it is, the higher the chance people will feel they should have been involved earlier, and if you've missed the mark widely it will look like you wasted time polishing the wrong thing. 

Prioritize getting feedback from the people you have a closer relationship with – your trust unit. This may be your boss, or a teammate. Their feedback helps “co-create” the strategy at this stage, and helps get you early buy-in.
 

9. Refine and create artifacts.

Hopefully the feedback from step 8 doesn't send you completely back to the drawing board. Rather, you've gotten some inspiration and guidance from your team on how to make your strategy even better. This is where you start to refine what you've done, improve the narrative, and organize your strategy in deliverable documentation. 

10. Present the story. 

The final step of the strategy is making sure it's communicated clearly. You should invest time is having well-written docs and strong visual decks because those are what get shared with people on the team and referred back to. 

When you've put your presentable docs together, meet with stakeholders to walk them through the strategy. Be well prepared and know how you're going to tell the story. This is where the strategy gets declared and you get the needed buy-in. 

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